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Terms of the eurozone's rescue plan for Greece are seen in Germany as a "serious defeat" for Chancellor Angela Merkel. The president of the Federation of German Taxpayers said the government "buckled" and that Germany would be forced to make the biggest European contribution in the bailout. Merkel even faced criticism from within her coalition government.

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With conservative Nicos Anastasiades elected as Cyprus' president, Germany and France are pressuring him to move promptly on financial and economic reform, as the price of their support for an EU bailout. "We are confident that the forthcoming government will significantly accelerate the pace of reforms to sustainable growth and to fiscal and financial stability, which are in the interest of Cyprus and the euro area as a whole," German Finance Minister Wolfgang Schaeuble and French Finance Minister Pierre Moscovici said in a joint statement.

Germany's conservative governing coalition, led by Chancellor Angela Merkel, was defeated in a key election in Lower Saxony state. The Green Party and the center-left Social Democratic Party gained a one-seat advantage in the regional parliament and ousted the conservative government aligned with Merkel. Her Christian Democratic Union party has been defeated in the previous 13 state elections.

The EU is widely expected to go ahead with a €10 billion financial rescue for Cyprus, but the deal creates a political dilemma for German Chancellor Angela Merkel. A secret German intelligence service report, according to Der Spiegel, concludes that the bailout would principally benefit Russian mafia figures, oligarchs and businessmen who have invested the profit from their illegal enterprises in Cyprus. The Cypriot government has dismissed such claims.

Spanish lenders are engaged in a price war for consumer deposits, which could trigger a widespread failure of the country's savings banks, or cajas, analysts and bankers said. Woes of the regional savings banks could even trigger problems with Spain's sovereign debt, analysts said.

EU officials praised Greece's latest and toughest round of spending cuts and tax increases, while financial markets largely took the measure as a sign that the nation is serious about bringing its budget deficit under control. The plan is worth about $6.5 billion. German Chancellor Angela Merkel called the package "the right step."